Too Much Debt...

Too much debt…

More and more Australian Families are finding themselves in a debt crisis. With the introduction of lines of credit, credit cards and the availability of credit in general, more Australians are finding it difficult to get their head above water and make ends meet.

This leads to stress with partners and families, and often leads people to a merry-go-round situation for many years, never becoming debt free, in most cases until retirement. This means there was never enough money to even begin creating wealth. As a result, the quality of life for over 90% of Australians will be extremely poor during the 30 or so years of retirement.

Did you know that if you currently have a mortgage you could be paying up to three times what you borrow in interest? What makes it even more difficult is that you have to pay up this in after tax dollars.

Australians are now more in debt than ever. Lines of credit offered by banks and other lending institutions are eating away at our equity and keeping us in debt longer than ever before. As part of an effective long-term financial planning strategy, debt management and debt structure must be considered.

Too much to worry about?

These days most people with a mortgage and young families don't have the time to be studying financial planning facts and figures. People are working longer hours and there are more financial pressures. Car payments, the mortgage, credit cards, interest free loans etc that all need to be paid. Not to mention the cost of living, interest and taxes. Even buying the first home these days seems daunting and out of reach to most people.

Today around the world more people are realising it makes so much sense to place your finances in the hands of someone you can trust who specialises in taxation, superannuation and all areas of money. We help you and guide you through the ever changing complex legislation relating to all areas of financial planning to assist you to retire in comfort.

Are you willing to take a gamble with you entire financial future? Place a call to us now and secure your financial future. Don't gamble it!

Little or no savings?

With the cost of living on the increase, more access to credit, the increase cost of entry into the property market, more and more people are finding it difficult save anything.

Another major factor to this is that most people spend in an undisciplined manner and have no idea what it actually costs them to live.

Most people don't realise the importance of managing the personal home finances in such a way to allow some savings to be made. In fact most people spend everything they earn most of their lives. They only realise they should have done more when it's too late.

The team specialise in assisting you turn your home finances into a successful 'business', ensuring there is a profit at the end of the year rather than just more debt. And as part of our unique "Wealth Creation Program" our team can show you new and innovative ways to save money. And not just by spending less, but by paying less tax, less interest and increasing the returns you may be currently getting on your investments.

Not enough protection?

When things get tough the first thing people cancel is their personal insurance. Having your bases covered with the correct level of insurance is an intelligent move. You never know when tragedy may strike. Think about this. Do you think any one would have boarded the Titanic if they knew it was about to sink?

What would happen to you if you hurt yourself at home or work and you were not covered? Who would pay the bills and provide an income to sustain your family and you lifestyle? It makes sense to insure your car or you home contents, yet many people don't see the importance of insuring their income.

Further to this our statistics indicate that those current clients that do have themselves protected in some form were paying more than they needed to, plus they were under insured..
Some people think they just cannot afford it. Such ones may be surprised at the possibilities that are available to them to be able to fund their insurance needs through superannuation. Your advisor will be able to explain to you the pros and cons of each of the options available to you, as well as its impact on your long term wealth creation.

Would you like a us to show you how you can insure for more while paying less for all you insurance needs?

The contents of this blog are of a general nature only and have not been prepared to take into account any particular investor’s objectives, financial situation or particular needs. Where this publication refers to a particular financial product then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product. We also recommend that you should seek professional advice from a financial adviser before making any decision to purchase any financial product referred to on this website. While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.

Tarnia Gurney (ASIC No. 292206) trading as Gurney Financial Services (ABN 85 296 598 954) an Authorised Representative of AFG Financial Planning, Australian Financial Services Licensee Number 247105, ABN 74 099 029 526.

Debt Management

To take control of your debt, the first thing you should do is a budget. This will allow you to see exactly how much you are earning and spending. It will also show where you are overspending and possibly where this expenditure can be reduced.

If the burden of debt is starting to take control of you, for some people to consolidate all of these debts into the one loan would be the best solution. Consolidation allows you to lower your overall interest rate and more easily manage your debt.

Loan consolidation will save you interest where your new repayment and loan term are at least equal to your total current loan repayments and loan terms. Otherwise, you could be converting your short-term debts into longer-term debt and be paying more interest in the long run.

One option is to use the equity in your residential premises. If you have owned your home over the last few years, with the fuelling property prices you are likely to have the capital to cover your existing mortgage, as well as other loans and credit cards. You would need to refinance your home loan which usually offers more competitive interest rates than Credit Cards and Personal Loans.

By paying less interest, more of your repayment can be used to reduce the debt. This assumes that you maintain the same overall repayments.

You should ensure that your existing home loan offers the features and flexibility to repay sooner rather than later.

To ensure you take control of your debts:

Review all your debts regularly;
Close credit card and store accounts and have the discipline not to obtain more. Don't buy on credit; you are only using money you don't have.
Credit cards can work well and to your advantage, as long as you use them correctly. Only use the interest free period.
If you find yourself on the credit card round-a-bout, (that is every time you pay some money off you credit card you go out and put more on it), you have to STOP. You are spending more than you're earning.
If you do retain a credit card then ask the institution to reduce the limit to the minimum needed - this should be what you can comfortably repay each month.
Every time your statement arrives pay twice the required amount. Realise that you can do without it. If you don't stop using credit you will ALWAYS be in debt.
Resolve to spend money where it makes sense and cut back where it doesn't, paying particular attention to cash and expenditures.
Your cheque book and credit card statements reveal big-ticket items, so that monitoring daily spending for a while may show where your money is slipping away in ways that don't give much satisfaction.
Most importantly a disciplined approach is needed to ensure debts are not increased to fund unnecessary purchases - a good rule of thumb is that your liabilities should not exceed your assets - if they do - it probably means you have borrowed for the wrong reasons.

Remember IT IS NEVER TOO LATE to take back control.

Review your spending patterns and curb these to fit within your budget!

The contents of this blog are of a general nature only and have not been prepared to take into account any particular investor’s objectives, financial situation or particular needs. Where this publication refers to a particular financial product then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product. We also recommend that you should seek professional advice from a financial adviser before making any decision to purchase any financial product referred to on this website. While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.
Tarnia Gurney (ASIC No. 292206) trading as Gurney Financial Services (ABN 85 296 598 954) an Authorised Representative of AFG Financial Planning, Australian Financial Services Licensee Number 247105, ABN 74 099 029 526.

Steps for planning your Finances

Budgeting Skills for U & Ur Family

Planning your Financial Future

Step One. Financial Analysis – Goals, where you want to be: 1, 2, 5 and 10 years

Step Two: Budget planning – bills, rates, mortgages, savings

Step Three: Debt Consolidating – get rid of bad debt – maybe refinance

Step Four: Minimise Risk – Fixing loans, consolidate and diversifying super

Step Five: Investment Portfolio – looking at: Superannuation & Cash Investment

Step Six: Plan Protection – Insurances:
Personal – Life, TPD, Trauma, Income Protection
General – Home Contents, Building, Car
Health – Ambulance, hospital, dental, etc

Step Seven: Estate Planning – Wills and Power of Attorneys.

Step Eight: Wealth Creation - Investment property & Share investment

Step Nine: Monitoring or Reviews

The contents of this blog are of a general nature only and have not been prepared to take into account any particular investor’s objectives, financial situation or particular needs. Where this publication refers to a particular financial product then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product. We also recommend that you should seek professional advice from a financial adviser before making any decision to purchase any financial product referred to on this website. While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.

Tarnia Gurney (ASIC No. 292206) trading as Gurney Financial Services (ABN 85 296 598 954) an Authorised Representative of AFG Financial Planning, Australian Financial Services Licensee Number 247105, ABN 74 099 029 526.